Glendale Shop Owner Accuses the City of Underhanded Tactics With Land Deal, Entertainment District

The owners of Authentic Persian and Oriental Rugs in Glendale say the city misled them about the planned Glendale 180 entertainment district and is now trying to take their land by eminent domain. They are also suing the Glendale Urban Renewal Authority, claiming that it improperly denied their proposal to redevelop the land and instead approved the proposal of a developer with ties to the city.

Ali Kheirkhahi and his family own 5.4 acres within the proposed Glendale 180 footprint. They say they worked with the city for years on plans for a riverwalk along the banks of Cherry Creek, but it eventually became clear that the city didn't want to partner on the project. Last month, the family received notice of a hearing scheduled for Tuesday, May 12, when the Glendale Urban Renewal Authority will decide whether to use eminent domain to acquire the family's property and more.

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Family members say they feel betrayed. "You don't expect this in America," Kheirkhahi says.

But city project representative Mike Gross says he's surprised that the family is upset. He says the city has been "extremely inclusive" of all landowners in planning the riverwalk project — now called Glendale 180. Plus, he says, it's not a given that the city will use eminent domain; for example, officials could vote to negotiate with landowners instead. "We haven’t had the meeting yet," Gross says. "There hasn’t been a decision."

Authentic Persian and Oriental Rugs has been in its current location since 1990.

Melanie Asmar

Authentic Persian and Oriental Rugs first opened in 1983 in Cherry Creek, says Nasrin Kholghy, who is Kheirkhahi's sister-in-law. She and her family are from Iran, but they came to Colorado in the 1970s to attend the University of Colorado. In 1990, the family moved the shop to its current location near the busy intersection of Colorado Boulevard and Virginia Avenue. They leased the building until 2006, when they bought the 5.4 acres, which includes the land underneath the shop.

A story about the sale in the Glendale Cherry Creek Chronicle noted that city officials had been talking about developing the creek area into a riverwalk full of restaurants, shops and entertainment. The sale to Kheirkhahi was a "very positive development," the newspaper wrote, given that the previous owner wasn't supportive of the riverwalk, which made him "less than a town favorite."

From the beginning, the family says its plan was to redevelop the land. In 2007, they say they came up with a proposal for an "urban village" that would include restaurants along Cherry Creek and retail shops facing Colorado Boulevard, complete with a parking garage. The plan also included thirteen top-story condominiums with views of the mountains.

The family says it presented its proposal to then-mayor Larry Harte. But they say city officials, including current Mayor Mike Dunafon, soon approached them about partnering on a bigger riverwalk project. The family was on board with the idea, and Kheirkhahi even accompanied city officials on a trip to San Antonio in 2010 to check out that city's riverwalk.

For the next several years, the family says it worked with the city on plans and met with developers and architects. After an animal-rights activist burned down the Sheepskin Factory next door to the rug shop, the family says it approached the city about building an addition onto the shop. "They said, 'Are these guys crazy? We want to condemn that,'" Kheirkhahi says.

The empty lot where the Sheepskin Factory once stood. It burned down in 2010.

Melanie Asmar

In May 2013, the Glendale city council voted to deem the riverwalk area "blighted" to pave the way for urban renewal. The area includes the land between Cherry Creek South Drive to the north, Virginia Avenue to the south, Cherry Street to the east and Colorado Boulevard to the west — and encompasses the 5.4 acres owned by Kheirkhahi and his family. To qualify as blighted, state law requires that an area have four of eleven "blight factors," such as deteriorating structures and unsafe conditions. Five factors are needed if the city wants to use eminent domain. Ten factors were found in the riverwalk area, according to minutes from the meeting at which the city council voted.

Family members say officials told them not to worry about the blight designation, so they didn't. "We are very smart people but we are also trustworthy people," says Saeed Kholghy.

But they're worried now. In late January, the city sent a letter to the landowners within the "Riverwalk Urban Renewal Plan Area," inviting them to present plans for redeveloping the entire riverwalk parcel. The deadline for the proposals was March 12. The family rushed to put a plan together and submit it on time. Their proposal was for a 1.6 million-square-foot development made up of retail shops, office space, entertainment venues, a hotel and residential units, with 4,040 parking spaces.

There was only one other proposal. It was from Wulfe and Company, a developer in Texas. It called for 303,225 square feet of restaurants, retail shops and entertainment venues, with 2,270 parking spaces. On March 30, the city council chose Wulfe's plan over the one submitted by the family, whose company is called M.A.K. Investment Group LLC.

The family's lawsuit alleges that the selection of Wulfe and Company's plan was a done deal. It further claims that city staffers misrepresented M.A.K.'s proposal to the city council and did not give M.A.K. a chance to explain it. "M.A.K. will now be forced to sell its property against its will for the benefit of a private developer," the lawsuit says.

In early April, the city unveiled its plans for the $175-million Glendale 180 project and said it's aiming to break ground this fall. That same month, the family got a notice informing them of the hearing on May 12. "The purpose of the hearing is to consider ratifying and confirming the use of eminent domain by the Glendale Urban Renewal Authority for the acquisiton of private property interests within Glendale Riverwalk Urban Renewal Plan Area," the notice says.

The "principal goals" of that plan, the notice continues, include attracting private investment, utilizing underdeveloped land and providing "important services" to the area, "for the purpose of remedying and preventing blight."

But Kheirkhahi and his family say the land wouldn't be blighted if the city had allowed them to develop it like they'd wanted to, instead of stringing them along under the guise of working together on a bigger riverwalk project. "We've been trying to develop and they kept us from doing it, and now they're saying it's blight," says Nasrin Kholghy.

The family filed its lawsuit on April 27 in Arapahoe County District Court. Glendale hasn't responded yet, and city officials say they can't comment on the allegations until it does. "Since they’ve filed suit, I'm not sure I can share a lot with you," Dunafon says.

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But both he and Gross say the city has worked with the landowners, including M.A.K., since the beginning. "The city did not mislead any property owners," Gross says. "We have noticed them all along. They have been at many, many meetings."

The landowners understood the significance of the blight study and how it would be used for urban renewal purposes, Gross says. And he says the city never blocked any plans by M.A.K. to develop its land on its own. "Were those ideas? Or were they plans?" Gross says. "All plans that get submitted to the city, they go through a process. There’s no plan that was submitted that was denied by the city."

Westword contacted two other landowners in the riverwalk area and will update this post if we hear back.

Kheirkhahi and his family plan to attend the May 12 hearing, and they're trying to gather supporters to show up in force. The hearing is at 7 p.m., and the family is hosting an event at their store at 5:30. The agenda includes hors d'oeuvres, remarks and a march to city hall. On Thursday, they hung a sign in their shop's window: "Stop Eminent Domain Abuse in Glendale."

Melanie Asmar is a staff writer for Westword. She joined the paper in 2009 and has won awards for her stories about education, immigration and epic legal battles. Got a tip? She'd love to hear it.